China Could Climb 15%

Strategists predict more gains for the market as earnings projections rise and confidence gains. Banks, energy and luxury goods are all favored.

After two tough years, Chinese stocks are rallying. The broad, investable benchmark MSCI China Index has rebounded more than 18% since November, when signs of economic recovery began to emerge consistently. "The sentiment turned because the long-term structural-growth story for China remains intact," says Dennis Lim, a portfolio manager for Franklin Templeton in Singapore. Although more modest than recent gains, the rise should continue, say strategists.